Civil Penalties Adjustment for 2021
| Published date | 18 February 2021 |
| Citation | 86 FR 10029 |
| Record Number | 2021-00765 |
| Section | Rules and Regulations |
| Court | National Endowment For The Arts,National Foundation On The Arts And The Humanities |
Federal Register, Volume 86 Issue 31 (Thursday, February 18, 2021)
[Federal Register Volume 86, Number 31 (Thursday, February 18, 2021)]
[Rules and Regulations]
[Pages 10029-10032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00765]
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NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
National Endowment for the Arts
45 CFR Parts 1149 and 1158
RIN 3135-AA33
Civil Penalties Adjustment for 2021
AGENCY: National Endowment for the Arts, National Foundation on the
Arts and the Humanities.
ACTION: Final rule.
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SUMMARY: The National Endowment for the Arts (NEA) is adjusting the
maximum civil monetary penalties (CMPs) that may be imposed for
violations of the Program Fraud Civil Remedies Act (PFCRA) and the
NEA's Restrictions on Lobbying to reflect the requirements of the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015 (the 2015 Act). The 2015 Act further amended the Federal Civil
Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment
Act) to improve the effectiveness of civil monetary penalties and to
maintain their deterrent effect. This final rule provides the 2021
annual inflation adjustments to the initial ``catch-up'' adjustments
made on June 15, 2017, and reflects all other inflation adjustments
made in the interim.
DATES: This rule is effective February 18, 2021.
FOR FURTHER INFORMATION CONTACT: Daniel Fishman, Assistant General
Counsel, National Endowment for the Arts, 400 7th St. SW, Washington,
DC 20506, Telephone: 202-682-5418.
SUPPLEMENTARY INFORMATION:
1. Background
On December 12, 2017, the NEA issued a final rule titled ``Federal
Civil Penalties Adjustments'' \1\ which finalized the NEA's June 15,
2017 interim final rule titled ``Implementing the Federal Civil
Penalties Adjustment Act Improvements Act of 2015'',\2\ implementing
the 2015 Act (section 701 of Pub. L. 114-74), which amended the
[[Page 10030]]
Inflation Adjustment Act (28 U.S.C. 2461 note) requiring catch-up and
annual adjustments to the NEA's CMPs. The 2015 Act requires agencies
make annual adjustments to its CMPs for inflation.
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\1\ 82 FR 58348.
\2\ 82 FR 27431.
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A CMP is defined in the Inflation Adjustment Act as any penalty,
fine, or other sanction that is (1) for a specific monetary amount as
provided by Federal law, or has a maximum amount provided for by
Federal law; (2) assessed or enforced by an agency pursuant to Federal
law; and (3) assessed or enforced pursuant to an administrative
proceeding or a civil action in the Federal courts.
These annual inflation adjustments are based on the percentage
change in the Consumer Price Index for all Urban Consumers (CPI-U) for
the month of October preceding the date of the adjustment, relative to
the October CPI-U in the year of the previous adjustment. The formula
for the amount of a CMP inflation adjustment is prescribed by law, as
explained in OMB Memorandum M-16-06 (February 24, 2016), and therefore
the amount of the adjustment is not subject to the exercise of
discretion by the Chairman of the National Endowment for the Arts
(Chairman).
The Office of Management and Budget has issued guidance on
implementing and calculating the 2021 adjustment under the 2015 Act.\3\
Per this guidance, the CPI-U adjustment multiplier for this annual
adjustment is 1.01182. In its prior rules, the NEA identified two CMPs,
which require adjustment: The penalty for false statements under the
PFCRA and the penalty for violations of the NEA's Restrictions on
Lobbying. With this rule, the NEA is adjusting the amount of those CMPs
accordingly.
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\3\ OMB Memorandum M-21-10 (December 23, 2020).
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2. Dates of Applicability
The inflation adjustments contained in this rule shall apply to any
violations assessed after January 15, 2021.
3. Adjustments
Two CMPs in NEA regulations require adjustment in accordance with
the 2015 Act: (1) The penalty associated with the Program Fraud Civil
Remedies Act (45 CFR 1149.9) and (2) the penalty associated with
Restrictions on Lobbying (45 CFR 1158.400; 45 CFR part 1158, appendix
A).
A. Adjustments to Penalties Under the NEA's Program Fraud Civil
Remedies Act Regulations
The current maximum penalty under the PFCRA for false claims and
statements is currently set at $11,664. The post-adjustment penalty or
range is obtained by multiplying the pre-adjustment penalty or range by
the percent change in the CPI-U over the relevant time period and
rounding to the nearest dollar. Between October 2018 and October 2019,
the CPI-U increased by 101.182 percent. Therefore, the new post-
adjustment maximum penalty under the PFCRA for false statements is
$11,664 x 1.01182 = $11,801.87 which rounds to $11,802. Therefore, the
maximum penalty under the PFCRA for false claims and statements will be
$11,802.
B. Adjustments to Penalties Under the NEA's Restrictions on Lobbying
Regulations
The penalty for violations of the Restrictions on Lobbying is
currently set at a range of a minimum of $20,478 and a maximum of
$204,891.64. This range was improperly not rounded last year. While no
penalties were assessed which would implicate this incorrect maximum
penalty, we note here that the amount should have been set at $204,892.
We set our penalties for this year in accordance with the correct
amount, without regard to the previous administrative error. The post-
adjustment penalty or range is obtained by multiplying the pre-
adjustment penalty or range by the percent change in the CPI-U over the
relevant time period and rounding to the nearest dollar. Between
October 2018 and October 2019, the CPI-U increased by 101.182 percent.
Therefore, the new post-adjustment minimum penalty under the
Restrictions on Lobbying is $20,478 x 1.01182 = $20,720.05, which
rounds to $20,720, and the maximum penalty under the Restrictions on
Lobbying is $204,892 x 1.01182 = $207,313.82, which rounds to $207,314.
Therefore, the range of penalties under the law on the Restrictions on
Lobbying shall be between $20,720 and $207,314.
Administrative Procedure Act
Section 553 of the Administrative Procedure Act requires agencies
to provide an opportunity for notice and comment on rulemaking and also
requires agencies to delay a rule's effective date for 30 days
following the date of publication in the Federal Register unless an
agency finds good cause to forgo these requirements. However, section
4(b)(2) of the 2015 Act requires agencies to adjust civil monetary
penalties notwithstanding section 553 of the Administrative Procedure
Act (APA) and publish annual inflation adjustments in the Federal
Register. ``This means that the public procedure the APA generally
requires . . . is not required for agencies to issue regulations
implementing the annual adjustment.'' OMB Memorandum M-18-03.
Even if the 2015 Act did not except this final rule from section
553 of the APA, the NEA has good cause to dispense with notice and
comment. Section 553(b)(B) authorizes agencies to dispense with notice
and comment procedures for rulemaking if the agency finds good cause
that notice and comment are impracticable, unnecessary, or contrary to
public interest. The annual adjustments to civil penalties for
inflation and the method of calculating those adjustments are
established by section 5 of the 2015 Act, as amended, leaving no
discretion for the NEA. Accordingly, public comment would be
impracticable because the NEA would be unable to consider such comments
in the rulemaking process.
Regulatory Planning and Review (Executive Order 12866)
Executive Order 12866 (E.O. 12866) established a process for review
of rules by the Office of Information and Regulatory Affairs, which is
within the Office of Management and Budget (OMB). Only ``significant''
proposed and final rules are subject to review under this Executive
Order. ``Significant,'' as used in E.O. 12866, means ``economically
significant.'' It refers to rules with (1) an impact on the economy of
$100 million; or that (2) were inconsistent or interfered with an
action taken or planned by another agency; (3) materially altered the
budgetary impact of entitlements, grants, user fees, or loan programs;
or (4) raised novel legal or policy issues.
This final rule would not be a significant policy change and OMB
has not reviewed this final rule under E.O. 12866. The NEA has made the
assessments required by E.O. 12866 and determined that this final rule:
(1) Will not have an effect of $100 million or more on the economy; (2)
will not adversely affect in a material way the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or Tribal governments or communities; (3) will not create a
serious inconsistency or otherwise interfere with an action taken or
planned by another agency; (4) does not alter the budgetary effects of
entitlements, grants, user fees, or loan
[[Page 10031]]
programs or the rights or obligations of their recipients; and (5) does
not raise novel legal or policy issues.
Federalism (Executive Order 13132)
This final rule does not have federalism implications, as set forth
in E.O. 13132. As used in this order, federalism implications mean
``substantial direct effects on the States, on the relationship between
the [N]ational [G]overnment and the States, or on the distribution of
power and responsibilities among the various levels of government.''
The NEA has determined that this final rule will not have federalism
implications within the meaning of E.O. 13132.
Civil Justice Reform (Executive Order 12988)
This final rule meets the applicable standards set forth in section
3(a) and 3(b)(2) of E.O. 12988. Specifically, this final rule is
written in clear language designed to help reduce litigation.
Indian Tribal Governments (Executive Order 13175)
Under the criteria in E.O. 13175, the NEA has evaluated this final
rule and determined that it would have no potential effects on
federally recognized Indian Tribes.
Takings (Executive Order 12630)
Under the criteria in E.O. 12630, this final rule does not have
significant takings implications. Therefore, a takings implication
assessment is not required.
Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b))
This final rule will not have a significant adverse impact on a
substantial number of small entities, including small businesses, small
governmental jurisdictions, or certain small not-for-profit
organizations.
Paperwork Reduction Act of 1995 (44 U.S.C., Chapter 35)
This final rule will not impose any ``information collection''
requirements under the Paperwork Reduction Act. Under the Act,
information collection means the obtaining or disclosure of facts or
opinions by or for an agency by 10 or more nonfederal persons.
Unfunded Mandates Act of 1995 (Section 202, Pub. L. 104-4)
This final rule does not contain a Federal mandate that will result
in the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year.
National Environmental Policy Act of 1969 (5 U.S.C. 804)
The final rule will not have a significant effect on the human
environment.
Small Business Regulatory Enforcement Fairness Act of 1996 (Sec. 804,
Pub. L. 104-121)
This final rule would not be a major rule as defined in section 804
of the Small Business Regulatory Enforcement Fairness Act of 1996. This
final rule will not result in an annual effect on the economy of $100
million or more, a major increase in costs or prices, significant
adverse effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based companies to
compete with foreign-based companies in domestic and export markets.
E-Government Act of 2002 (44 U.S.C. 3504)
Section 206 of the E-Government Act requires agencies, to the
extent practicable, to ensure that all information about that agency
required to be published in the Federal Register is also published on a
publicly accessible website. All information about the NEA required to
be published in the Federal Register may be accessed at https://www.arts.gov. This Act also requires agencies to accept public comments
on their rules ``by electronic means.'' See heading ``Public
Participation'' for directions on electronic submission of public
comments on this final rule.
Finally, the E-Government Act requires, to the extent practicable,
that agencies ensure that a publicly accessible Federal Government
website contains electronic dockets for rulemakings under the
Administrative Procedure Act of 1946 (5 U.S.C. 551 et seq.). Under this
Act, an electronic docket consists of all submissions under section
553(c) of title 5, United States Code; and all other materials that by
agency rule or practice are included in the rulemaking docket under
section 553(c) of title 5, United States Code, whether or not submitted
electronically. The website https://www.regulations.gov contains
electronic dockets for the NEA's rulemakings under the Administrative
Procedure Act of 1946.
Plain Writing Act of 2010 (5 U.S.C. 301)
Under this Act, the term ``plain writing'' means writing that is
clear, concise, well-organized, and follows other best practices
appropriate to the subject or field and intended audience. To ensure
that this final rule has been written in plain and clear language so
that it can be used and understood by the public, the NEA has modeled
the language of this final rule on the Federal Plain Language
Guidelines.
Public Participation (Executive Order 13563)
The NEA encourages public participation by ensuring its
documentation is understandable by the general public, and has written
this final rule in compliance with Executive Order 13563 by ensuring
its accessibility, consistency, simplicity of language, and overall
comprehensibility.
List of Subjects in 45 CFR Parts 1149 and 1158
Administrative practice and procedure, Government contracts, Grant
programs, Loan programs, Lobbying, Penalties.
For the reasons stated in the preamble, the NEA amends 45 CFR
chapter XI, subchapter B, as follows:
PART 1149--PROGRAM FRAUD CIVIL REMEDIES ACT REGULATIONS
0
1. The authority citation for part 1149 continues to read as follows:
Authority: 5 U.S.C. App. 8G(a)(2); 20 U.S.C. 959; 28 U.S.C. 2461
note; 31 U.S.C. 3801-3812.
0
2. Revise Sec. 1149.9(a)(1) to read as follows:
Sec. 1149.9 What civil penalties and assessments may I be subjected
to?
(a) * * *
(1) A civil penalty of not more than $11,802 for each false,
fictitious or fraudulent statement or claim; and
* * * * *
PART 1158--NEW RESTRICTIONS ON LOBBYING
0
3. The authority citation for part 1158 continues to read as follows:
Authority: 20 U.S.C. 959; 28 U.S.C. 2461; 31 U.S.C. 1352.
Sec. 1158.400 [Amended]
0
4. Amend Sec. 1158.400(a), (b), and (e) by:
0
a. Removing ``$20,478'' and adding in its place ``$20,720'' each place
it appears.
0
b. Removing ``$204,891.64'' and adding in its place ``$207,314'' each
place it appears.
Appendix A to Part 1158 [Amended]
0
5. Amend appendix A to part 1158 by:
[[Page 10032]]
0
a. Removing ``$20,478'' and adding in its place ``$20,720'' each place
it appears.
0
b. Removing ``$204,891.64'' and adding in its place ``$207,314'' each
place it appears.
Dated: January 11, 2021.
Anthony M. Bennett,
Director of Administrative Services.
[FR Doc. 2021-00765 Filed 2-17-21; 8:45 am]
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